Better home efficiency can save UK households £270

Energy efficient improvements to home heating, insulation, lighting and appliances could reduce the energy consumed in UK households each year by a quarter and knock £270 off the average household energy bill of £1,100 – a saving that is equivalent to the output of six nuclear power stations the size of Hinkley Point C.

That’s according to the briefing paper published today by the UK Energy Research Centre and University of Sussex Centre on Innovation and Energy Demand, which comes ahead of the Government’s long-overdue Clean Growth Plan and amidst an ongoing independent review into the cost of energy.

Using strict HM Treasury guidelines for policy appraisal – which involves estimating the cash value of changes in energy demand, CO2 emissions, air quality and home comfort – the researchers estimate that investing in efficient heating, insulation, controls, lighting and appliances could deliver a net benefit to the UK economy of £7.5 billion.

The full economic benefits of reducing energy demand by a quarter could be up to £47 billion. This includes further economic benefits of improved health from warmer homes, stimulus to the economy of installing the energy efficiency improvements required, and capacity saved in the electricity system. Some of these benefits would also arise from other types of low carbon investment.

The briefing paper also finds that it is technically possible to reduce energy demand by a further 25 per cent, and that these additional savings could also pay for themselves in the future. This means that it may be possible in time to halve energy demand in UK homes.

Jim Watson, Director of the UK Energy Research Centre, believes the research proves that there is still huge potential to save energy from UK homes.

“It is clear that reducing energy demand needs to be a priority if the government is serious about bringing down energy bills. It should be the centrepiece of the Clean Growth Plan, which is now overdue,” he said.

Jan Rosenow, Senior Fellow at the Centre on Innovation and Energy Demand, added: “Savings from energy efficiency improvements in homes since 2004 mean a typical dual fuel customer’s bill was £490 lower in 2015 than it would have been without those improvements.

“At the same time, households use more appliances, more lamps and enjoy higher in-home temperatures than they did in 2004.

“Past achievements go to show that huge energy cost savings can be realised quickly and without compromising the benefits households enjoy from their energy services.

“With further investment in energy efficiency, this trend can continue for many years to come, so there is every reason to be ambitious about a low cost energy future.”